Alexander & Baldwin, Inc.
Table of Contents
| | | | | |
| Company Overview | |
| Company Profile | |
| Glossary of Terms | |
| Statement on Management's Use of Non-GAAP Financial Measures | |
| Financial Summary | |
| Table 1 – Condensed Consolidated Balance Sheets | |
| Table 2 – Condensed Consolidated Statements of Operations | |
| Table 3 – Segment Results | |
| Table 4 – Condensed Consolidated Statements of Cash Flows | |
| Table 5 – Debt Summary | |
| Table 6 – Capitalization & Financial Ratios | |
| Table 7 – Consolidated Metrics | |
| Commercial Real Estate | |
| Table 8 – CRE Metrics | |
| Table 9 – Occupancy | |
| Table 10 – NOI and Same-Store NOI by Type | |
| Table 11 – Improved Property Report | |
| Table 12 – Ground Lease Report | |
| Table 13 – Top 10 Tenants Ranked by ABR | |
| Table 14 – Lease Expiration Schedule | |
| Table 15 – New & Renewal Lease Summary | |
| Table 16 – Portfolio Repositioning, Redevelopment & Development Summary | |
| Table 17 – Transactional Activity (2019 - 2020) | |
| Land Operations | |
| Table 18 – Statement of Operating Profit and EBITDA | |
| Table 19 – Key Active Development-for-sale Projects and Investments | |
| Table 20 – Landholdings as of June 30, 2020 | |
| Materials & Construction | |
| Table 21 – Statement of Operating Profit, EBITDA and Adjusted EBITDA | |
Forward-Looking Statements
Statements in this Supplemental Information document that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding possible or assumed future results of operations, business strategies, growth opportunities and competitive positions, as well as the rapidly changing challenges with, and the Company's plans and responses to, the novel coronavirus (COVID-19) pandemic and related economic disruptions. Such forward-looking statements speak only as of the date the statements were made and are not guarantees of future performance. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from those expressed in or implied by the forward-looking statements. These factors include, but are not limited to, prevailing market conditions and other factors related to the Company's REIT status and the Company's business, risks associated with COVID-19 and its impact on the Company's businesses, results of operations, liquidity, and financial condition, the evaluation of alternatives by the Company’s joint venture related to its materials and construction business and by the Company's joint venture related to the development of Kukui‘ula, and the risk factors discussed in the Company's most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission. The information in this Supplemental Information document should be evaluated in light of these important risk factors. We do not undertake any obligation to update the Company's forward-looking statements.
Basis of Presentation
The information contained in this Supplemental Information document does not purport to disclose all items required by accounting principles generally accepted in the United States of America (GAAP).
Company Overview
Alexander & Baldwin, Inc.
Company Overview
Company Profile
Alexander & Baldwin, Inc. ("A&B" or the "Company") is a fully integrated real estate investment trust ("REIT") headquartered in Honolulu, Hawai‘i. The Company has a 150-year history of being an integral piece of Hawai‘i and its economy making it uniquely qualified to create value for shareholders through a strategy focused on asset management and growth primarily in its commercial real estate holdings in Hawai‘i.
The Company operates in three reportable segments: Commercial Real Estate ("CRE"); Land Operations; and Materials & Construction ("M&C") and is composed of the following as of June 30, 2020:
•A 3.9 million-square-foot portfolio of commercial real estate and 153.8 acres of ground leases throughout the Hawaiian islands, including 2.5 million square feet of largely grocery/drugstore-anchored retail centers;
•More than 28,000 acres of landholdings across its three segments, including development-for-hold and development-for-sale activities in select Hawai‘i locations; and
•Materials & Construction operations primarily through its wholly owned subsidiary, Grace Pacific LLC ("Grace Pacific").
Throughout this Supplemental Information document, references to "we," "our," "us" and "our Company" refer to Alexander & Baldwin, Inc., together with its consolidated subsidiaries.
| | | | | | | | | | | |
| Executive Officers | | | |
| | | |
| Christopher Benjamin | | Brett Brown | |
| President & Chief Executive Officer | | Executive Vice President & Chief Financial Officer | |
| | | |
| Lance Parker | | Nelson Chun | |
| Executive Vice President & Chief Real Estate Officer | | Executive Vice President & Chief Legal Officer | |
| | | |
| Jerrod Schreck | | Meredith Ching | |
| President, Grace Pacific | | Executive Vice President, External Affairs | |
| | | |
| Contact Information | | Equity Research | |
| | | |
| Corporate Headquarters | | Evercore ISI | |
| 822 Bishop Street | | Sheila McGrath | |
| Honolulu, HI 96813 | | (212) 497-0882 | |
| | sheila.mcgrath@evercoreisi.com | |
| Investor Relations | | | |
| Brett Brown | | Sidoti & Company, LLC | |
| Executive Vice President & Chief Financial Officer | | Stephen O'Hara | |
| (808) 525-8475 | | (212) 894-3329 | |
| investorrelations@abhi.com | | sohara@sidoti.com | |
| | | |
| Transfer Agent & Registrar | | Piper Sandler & Co. | |
| Computershare | | Alexander Goldfarb | |
| P.O. Box 505000 | | (212) 466-7937 | |
| Louisville, KY 40233-5000 | | alexander.goldfarb@psc.com | |
| (866) 442-6551 | | | |
| | Other Company Information | |
| Overnight Correspondence | | | |
| Computershare | | Stock exchange listing: | NYSE: ALEX |
| 462 South 4th Street, Suite 1600 | | Corporate website: | www.alexanderbaldwin.com |
| Louisville, KY 40202 | | Grace Pacific website: | www.gracepacific.com |
| | Market capitalization
at June 30, 2020: | $0.9B |
Shareholder website: www.computershare.com/investor | | 3-month average trading volume: | 457K |
Online inquiries: www-us.computershare.com/investor/contact | | Independent auditors: | Deloitte & Touche LLP |
Alexander & Baldwin, Inc.
Company Overview
Glossary of Terms
| | | | | |
| ABR | Annualized Base Rent ("ABR") is the current month's contractual base rent multiplied by 12. Base rent is presented without consideration of percentage rent that may, in some cases, be significant. |
| |
| Backlog | Backlog represents the total amount of revenue that Grace Pacific and Maui Paving, LLC, a 50-percent-owned unconsolidated affiliate, expect to realize on contracts awarded. Backlog primarily consists of asphalt paving and, to a lesser extent, Grace Pacific’s consolidated revenue from its construction-and traffic control-related products. Backlog includes estimated revenue from the remaining portion of contracts not yet completed, as well as revenue from approved change orders. The length of time that projects remain in backlog can span from a few days for a small volume of work to 36 months for large paving contracts and contracts performed in phases. This amount includes opportunity backlog consisting of government contracts in which Grace Pacific has been confirmed to be the lowest bidder and formal communication of the award is perfunctory at the time of this disclosure. Circumstances outside the Company's control such as procurement or technical protests may arise that prevent the finalization of such contracts. |
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| NOI | Net Operating Income ("NOI") represents total Commercial Real Estate cash-based operating revenues (i.e., billings for which collectability is deemed probable) less direct property-related operating expenses. The calculation of NOI excludes the impact of depreciation and amortization (including amortization of maintenance capital, tenant improvements and leasing commissions); straight-line lease adjustments (including amortization of lease incentives); amortization of favorable/unfavorable lease assets/liabilities; lease termination income; other income and expense, net; selling, general, administrative and other expenses; and impairment of commercial real estate assets. |
| |
| Comparable Lease | Comparable Leases are either renewals or new leases executed for units that have been vacated in the previous 12 months for comparable space and comparable lease terms. Expansions, contractions and strategic short-term renewals are excluded from the Comparable Lease pool. |
| |
| Consolidated Adjusted EBITDA | Consolidated Adjusted EBITDA is calculated by adjusting Consolidated EBITDA for non-cash asset impairments recorded in the M&C segment. |
| |
| CRE Portfolio | Composed of (1) retail, industrial and office improved properties subject to operating leases ("Improved Portfolio") and (2) assets subject to ground leases ("Ground Leases") within the CRE segment. |
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| Debt-service Coverage Ratio | The ratio of Consolidated Adjusted EBITDA to the sum of debt service (which includes interest expense, principal payments for financing leases and term debt, as well as principal amortization of mortgage debt, and excludes balloon payments), for the trailing twelve months. |
| |
| EBITDA | Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is calculated on a consolidated basis ("Consolidated EBITDA") by adjusting the Company’s consolidated net income (loss) to exclude the impact of interest expense, income taxes, and depreciation and amortization.
EBITDA is calculated for each segment ("Segment EBITDA" or "Commercial Real Estate EBITDA," "Land Operations EBITDA," and "Materials & Construction EBITDA") by adjusting segment operating profit (which excludes interest and tax expenses), as applicable, by adding back depreciation and amortization recorded at the respective segment. |
| |
| FFO | Funds From Operations ("FFO") is presented by the Company as a widely used non-GAAP measure of operating performance for real estate companies. FFO is defined by the National Association of Real Estate Investment Trusts ("Nareit") December 2018 Financial Standards White Paper as follows: net income (calculated in accordance with GAAP), excluding (1) depreciation and amortization related to real estate, (2) gains and losses from the sale of certain real estate assets, (3) gains and losses from change in control and (4) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. The Company presents different forms of FFO:
•"Core FFO" represents a non-GAAP measure relevant to the operating performance of its commercial real estate business (i.e., its core business). Core FFO is calculated by adjusting CRE operating profit to exclude items noted above (i.e., depreciation and amortization related to real estate included in CRE operating profit) and to make further adjustments to include expenses not included in CRE operating profit but that are necessary to accurately reflect the operating performance of its core business (i.e., unallocated corporate expenses and interest expense attributable to this core business).
•FFO represents the Nareit-defined non-GAAP measure for the operating performance of the Company as a whole. The Company's calculation refers to net income (loss) available to A&B common shareholders as its starting point in the calculation of FFO.
The Company presents both non-GAAP measures and reconciles each to the most directly-comparable GAAP measure as well as reconciling FFO to Core FFO. |
| |
| GAAP | Generally accepted accounting principles in the United States of America. |
| |
| | | | | |
| GLA | Total area measured in square feet ("SF") available for lease in our retail, industrial or office properties. GLA is periodically adjusted based on remeasurement or reconfiguration of space and may change period over period for these remeasurements. |
| |
| Maintenance Capital Expenditures | As it relates to CRE segment capital expenditures (i.e., capitalizable costs on a cash basis), expenditures necessary to maintain building value, the current income stream and position in the market. Such expenditures may include building/area improvements and tenant space improvements. |
| |
| M&C Adjusted EBITDA | M&C Adjusted EBITDA is calculated by adjusting Materials & Construction EBITDA for non-cash asset impairments recorded in the M&C segment and income attributable to noncontrolling interests as presented in our consolidated statements of operations. |
| |
| Net Debt | Net Debt is calculated by adjusting the Company's total debt to its notional amount (by excluding unamortized premium, discount and capitalized loan fees) and by subtracting cash and cash equivalents recorded in our consolidated balance sheets. |
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| Occupancy | The percentage of square footage leased and commenced to gross leasable space at the end of the period reported. |
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| Rent Spread | Percentage change in ABR in the first year of a signed lease relative to the ABR in the last year of the prior lease. |
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| Same-Store | The Company reports NOI and Occupancy on a Same-Store basis, which includes the results of properties that were owned and operated for the entirety of the prior calendar year and current reporting period, year-to-date. The Same-Store pool excludes properties under development or redevelopment and also excludes properties acquired or sold during either of the comparable reporting periods. While there is management judgment involved in classifications, new developments and redevelopments are moved into the Same-Store pool after one full calendar year of stabilized operation. Properties included in held for sale are excluded from Same-Store. |
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| Stabilization | New developments and redevelopments are generally considered stabilized upon the initial attainment of 90% occupancy. |
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| Straight-line Rent | Non-cash revenue related to a GAAP requirement to average tenant rents over the life of the lease, regardless of the actual cash collected in the reporting period. |
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| TTM | Trailing twelve months. |
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| Year Built | Year of most recent repositioning/redevelopment or year built if no repositioning/redevelopment has occurred. |
Alexander & Baldwin, Inc.
Company Overview
Statement on Management's Use of Non-GAAP Financial Measures
The Company presents the following non-GAAP financial measures in this Supplemental Information document:
•Consolidated EBITDA
•Consolidated Adjusted EBITDA
•FFO
•Core FFO
•Commercial Real Estate NOI and Same-Store NOI
•Commercial Real Estate EBITDA
•Land Operations EBITDA
•Materials & Construction EBITDA and M&C Adjusted EBITDA
The Company uses non-GAAP measures when evaluating operating performance because management believes that they provide additional insight into the Company's and segments' core operating results, and/or the underlying business trends affecting performance on a consistent and comparable basis from period to period. These measures generally are provided to investors as an additional means of evaluating the performance of ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP.
EBITDA is a non-GAAP measure used by the Company in evaluating the Company's and segments' operating performance on a consistent and comparable basis from period to period. The Company provides this information to investors as an additional means of evaluating the performance of the Company's and segments' ongoing operations. The Company adjusts Consolidated EBITDA for the asset impairments recorded in the Materials & Construction segment, as the Company believes these items are infrequent in nature, to arrive at Consolidated Adjusted EBITDA. The Company similarly adjusts Materials & Construction EBITDA for the same asset impairments in addition to adjusting for income attributable to noncontrolling interests as presented in our consolidated statements of operations to arrive at M&C Adjusted EBITDA. By excluding these items from Consolidated EBITDA and Segment EBITDA, the Company believes it provides meaningful supplemental information about its core operating performance and facilitates comparisons to historical operating results. Such non-GAAP measures should not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
FFO is presented by the Company as a widely used non-GAAP measure of operating performance for real estate companies. The Company believes that, subject to the following limitations, FFO provides a supplemental measure to net income (calculated in accordance with GAAP) for comparing its performance and operations to those of other REITs. FFO does not represent an alternative to net income calculated in accordance with GAAP. In addition, FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to cash flow from operating activities, determined in accordance with GAAP, as a measure of our liquidity. The Company presents different forms of FFO:
•Core FFO represents a non-GAAP measure relevant to the operating performance of its commercial real estate business (i.e., its core business). Core FFO is calculated by adjusting CRE operating profit to exclude items in a manner consistent with FFO (i.e., depreciation and amortization related to real estate included in CRE operating profit) and to make further adjustments to include expenses not included in CRE operating profit but that are necessary to accurately reflect the operating performance of its core business (i.e., unallocated corporate expenses and interest expense attributable to this core business). The Company believes such adjustments facilitate the comparable measurement of the Company's core operating performance over time. The Company believes that Core FFO, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess and compare the operating performance of REITs.
•FFO represents the Nareit-defined non-GAAP measure for the operating performance of the Company as a whole. The Company's calculation refers to net income (loss) available to A&B common shareholders as its starting point in the calculation of FFO.
The Company presents both non-GAAP measures and reconciles each to the most directly-comparable GAAP measure as well as reconciling FFO to Core FFO. The Company's FFO and Core FFO may not be comparable to FFO non-GAAP measures reported by other REITs. These other REITs may not define the term in accordance with the current Nareit definition or may interpret the current Nareit definition differently.
NOI is a non-GAAP measure used internally in evaluating the unlevered performance of the Company's Commercial Real Estate portfolio. The Company believes NOI provides useful information to investors regarding the Company's financial condition and results of operations because it reflects only those cash income and expense items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the Company's properties as this measure is not affected by non-cash revenue and expense recognition items, the impact of depreciation and amortization expenses or other gains or losses that relate to the Company's ownership of properties. The Company believes the exclusion of these items from operating profit (loss) is useful because the resulting measure captures the actual cash-based revenue generated and actual expenses incurred in operating the Company's Commercial Real Estate portfolio as well as trends in occupancy rates, rental rates and operating costs. NOI should not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The Company reports NOI and Occupancy on a Same-Store basis, which includes the results of properties that were owned and operated for the entirety of the current and prior calendar year. The Company believes that reporting on a Same-Store basis provides investors with additional information regarding the operating performance of comparable assets versus from other factors (such as the effect of developments, redevelopments, acquisitions or dispositions).
The calculations of these financial measures are described in the Glossary of Terms of this Supplemental Information document. To emphasize, the Company's methods of calculating non-GAAP measures may differ from methods employed by other companies and thus may not be comparable to such other companies.
Required reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are set forth in the following tables of this Supplemental Information document:
•Refer to Table 7 for a reconciliation of consolidated net income to Consolidated EBITDA and Consolidated Adjusted EBITDA, a reconciliation of consolidated net income (loss) available to A&B common shareholders to FFO and Core FFO, as well as a reconciliation of Commercial Real Estate operating profit to Core FFO.
•Refer to Table 8 for a reconciliation of Commercial Real Estate operating profit to NOI and Same-Store NOI and a reconciliation of Commercial Real Estate operating profit to Commercial Real Estate EBITDA.
•Refer to Table 18 for a reconciliation of Land Operations operating profit to Land Operations EBITDA.
•Refer to Table 21 for a reconciliation of Materials & Construction operating profit to Materials & Construction EBITDA and M&C Adjusted EBITDA.
Financial Summary
Alexander & Baldwin, Inc.
Financial Summary
Table 1 – Condensed Consolidated Balance Sheets
($ in millions, unaudited)
| | | | | | | | | | | |
| June 30,
2020 | | December 31, 2019 |
| ASSETS | | | |
| Real estate investments | | | |
| Real estate property | $ | 1,541.4 | | | $ | 1,540.2 | |
| Accumulated depreciation | (141.4) | | | (127.5) | |
| Real estate property, net | 1,400.0 | | | 1,412.7 | |
| Real estate developments | 77.9 | | | 79.1 | |
| Investments in real estate joint ventures and partnerships | 132.8 | | | 133.4 | |
| Real estate intangible assets, net | 67.9 | | | 74.9 | |
| Real estate investments, net | 1,678.6 | | | 1,700.1 | |
| Cash and cash equivalents | 96.2 | | | 15.2 | |
| Restricted cash | 0.2 | | | 0.2 | |
| Accounts receivable and retention, net of allowance for credit losses and allowance for doubtful accounts of $4.1 million and $0.4 million as of June 30, 2020 and December 31, 2019, respectively | 48.0 | | | 51.6 | |
| Inventories | 20.2 | | | 20.7 | |
| Other property, net | 119.8 | | | 124.4 | |
| Operating lease right-of-use assets | 20.0 | | | 21.8 | |
| Goodwill | 10.5 | | | 15.4 | |
| Other receivables, net of allowance for credit losses and allowance for doubtful accounts of $4.3 million and $1.6 million as of June 30, 2020 and December 31, 2019, respectively | 14.0 | | | 27.8 | |
| Prepaid expenses and other assets, net of allowance for credit losses and allowance for doubtful accounts of $0.1 million and $0 million as of June 30, 2020 and December 31, 2019, respectively | 98.7 | | | 107.1 | |
| | | |
| Total assets | $ | 2,106.2 | | | $ | 2,084.3 | |
| | | |
| LIABILITIES AND EQUITY | | | |
| Liabilities: | | | |
| Notes payable and other debt | $ | 768.6 | | | $ | 704.6 | |
| Accounts payable | 12.4 | | | 17.8 | |
| Operating lease liabilities | 19.8 | | | 21.6 | |
| Accrued pension and post-retirement benefits | 26.9 | | | 26.8 | |
| Indemnity holdbacks | 7.5 | | | 7.5 | |
| Deferred revenue | 66.8 | | | 67.6 | |
| Accrued and other liabilities | 93.4 | | | 103.4 | |
| | | |
| Total liabilities | 995.4 | | | 949.3 | |
| Commitments and Contingencies | | | |
| Redeemable Noncontrolling Interest | 6.2 | | | 6.3 | |
| Equity: | | | |
| Common stock - no par value; authorized, 150 million shares; outstanding, 72.3 million shares at June 30, 2020 and December 31, 2019, respectively | 1,803.1 | | | 1,800.1 | |
| Accumulated other comprehensive income (loss) | (55.1) | | | (48.8) | |
| Distributions in excess of accumulated earnings | (643.4) | | | (626.2) | |
| Total A&B shareholders' equity | 1,104.6 | | | 1,125.1 | |
| Noncontrolling interest | — | | | 3.6 | |
| Total equity | 1,104.6 | | | 1,128.7 | |
| Total liabilities and equity | $ | 2,106.2 | | | $ | 2,084.3 | |
Alexander & Baldwin, Inc.
Financial Summary
Table 2 – Condensed Consolidated Statements of Operations
($ in millions, except per-share amounts; unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | |
| | 2020 | | 2019 | | 2020 | | 2019 |
| Operating Revenue: | | | | | | | | |
| Commercial Real Estate | | $ | 34.0 | | | $ | 39.1 | | | 77.4 | | | $ | 75.9 | |
| Land Operations | | 9.8 | | | 24.9 | | | 21.3 | | | 73.9 | |
| Materials & Construction | | 30.1 | | | 45.1 | | | 56.0 | | | 88.7 | |
| Total operating revenue | | 73.9 | | | 109.1 | | | 154.7 | | | 238.5 | |
| Operating Costs and Expenses: | | | | | | | | |
| Cost of Commercial Real Estate | | 24.0 | | | 21.3 | | | 48.3 | | | 40.5 | |
| Cost of Land Operations | | 2.9 | | | 23.2 | | | 10.9 | | | 62.6 | |
| Cost of Materials & Construction | | 28.2 | | | 43.2 | | | 53.2 | | | 85.2 | |
| Selling, general and administrative | | 9.0 | | | 16.2 | | | 22.8 | | | 31.8 | |
| | | | | | | | |
| Impairment of assets related to Materials & Construction | | 5.6 | | | — | | | 5.6 | | | — | |
| Total operating costs and expenses | | 69.7 | | | 103.9 | | | 140.8 | | | 220.1 | |
| Gain (loss) on the disposal of assets, net | | — | | | — | | | 0.5 | | | — | |
| Operating Income (Loss) | | 4.2 | | | 5.2 | | | 14.4 | | | 18.4 | |
| Other Income and (Expenses): | | | | | | | | |
| Income (loss) related to joint ventures | | (0.1) | | | 1.0 | | | 3.1 | | | 3.7 | |
| | | | | | | | |
| Interest and other income (expense), net | | (0.4) | | | 0.6 | | | (0.2) | | | 2.2 | |
| Interest expense | | (7.8) | | | (8.1) | | | (15.6) | | | (17.2) | |
| Income (Loss) from Continuing Operations Before Income Taxes | | (4.1) | | | (1.3) | | | 1.7 | | | 7.1 | |
| Income tax benefit (expense) | | — | | | — | | | — | | | 1.1 | |
| Income (Loss) from Continuing Operations | | (4.1) | | | (1.3) | | | 1.7 | | | 8.2 | |
| Income (loss) from discontinued operations, net of income taxes | | (0.6) | | | 0.1 | | | (0.8) | | | (0.7) | |
| Net Income (Loss) | | (4.7) | | | (1.2) | | | 0.9 | | | 7.5 | |
| Loss (income) attributable to noncontrolling interest | | — | | | 0.4 | | | 0.6 | | | 0.7 | |
| Net Income (Loss) Attributable to A&B Shareholders | | $ | (4.7) | | | $ | (0.8) | | | $ | 1.5 | | | $ | 8.2 | |
| | | | | | | | |
| Earnings (Loss) Per Share Available to A&B Shareholders: | | | | | | | | |
| Basic Earnings (Loss) Per Share of Common Stock: | | | | | | | | |
| Continuing operations available to A&B shareholders | | $ | (0.06) | | | $ | (0.01) | | | $ | 0.03 | | | $ | 0.12 | |
| Discontinued operations available to A&B shareholders | | (0.01) | | | — | | | (0.01) | | | (0.01) | |
| Net income (loss) available to A&B shareholders | | $ | (0.07) | | | $ | (0.01) | | | $ | 0.02 | | | $ | 0.11 | |
| | | | | | | | |
| Diluted Earnings (Loss) Per Share of Common Stock: | | | | | | | | |
| Continuing operations available to A&B shareholders | | $ | (0.06) | | | $ | (0.01) | | | $ | 0.03 | | | $ | 0.12 | |
| Discontinued operations available to A&B shareholders | | (0.01) | | | — | | | (0.01) | | | (0.01) | |
| Net income (loss) available to A&B shareholders | | $ | (0.07) | | | $ | (0.01) | | | $ | 0.02 | | | $ | 0.11 | |
| | | | | | | | |
| Weighted-Average Number of Shares Outstanding: | | | | | | | | |
| Basic | | 72.3 | | 72.2 | | | 72.3 | | | 72.1 | |
| Diluted | | 72.3 | | 72.2 | | | 72.4 | | | 72.5 | |
| | | | | | | | |
| Amounts Available to A&B Common Shareholders: | | | | | | | | |
| Continuing operations available to A&B common shareholders | | $ | (4.1) | | | $ | (0.9) | | | $ | 2.3 | | | $ | 8.9 | |
| Discontinued operations available to A&B common shareholders | | (0.6) | | | 0.1 | | | (0.8) | | | (0.7) | |
| Net income (loss) available to A&B common shareholders | | $ | (4.7) | | | $ | (0.8) | | | $ | 1.5 | | | $ | 8.2 | |
Alexander & Baldwin, Inc.
Financial Summary
Table 3 – Segment Results
($ in millions, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | |
| | 2020 | | 2019 | | 2020 | | 2019 |
| Operating Revenue: | | | | | | | | |
| Commercial Real Estate | | $ | 34.0 | | | $ | 39.1 | | | $ | 77.4 | | | $ | 75.9 | |
| Land Operations | | 9.8 | | | 24.9 | | | 21.3 | | | 73.9 | |
| Materials & Construction | | 30.1 | | | 45.1 | | | 56.0 | | | 88.7 | |
| Total operating revenue | | 73.9 | | | 109.1 | | | 154.7 | | | 238.5 | |
| Operating Profit (Loss): | | | | | | | | |
Commercial Real Estate1 | | 8.9 | | | 17.0 | | | 26.9 | | | 32.6 | |
Land Operations2 | | 4.7 | | | 0.5 | | | 9.7 | | | 13.1 | |
| Materials & Construction | | (7.6) | | | (4.3) | | | (11.4) | | | (8.8) | |
| Total operating profit (loss) | | 6.0 | | | 13.2 | | | 25.2 | | | 36.9 | |
| Gain (loss) on the disposal of assets, net | | — | | | — | | | 0.5 | | | — | |
| Interest expense | | (7.8) | | | (8.1) | | | (15.6) | | | (17.2) | |
| Corporate and other expense | | (2.3) | | | (6.4) | | | (8.4) | | | (12.6) | |
| | | | | | | | |
| Income (Loss) from Continuing Operations Before Income Taxes | | (4.1) | | | (1.3) | | | 1.7 | | | 7.1 | |
| Income tax benefit (expense) | | — | | | — | | | — | | | 1.1 | |
| Income (Loss) from Continuing Operations | | (4.1) | | | (1.3) | | | 1.7 | | | 8.2 | |
| Income (loss) from discontinued operations, net of income taxes | | (0.6) | | | 0.1 | | | (0.8) | | | (0.7) | |
| Net Income (Loss) | | (4.7) | | | (1.2) | | | 0.9 | | | 7.5 | |
| Loss (income) attributable to noncontrolling interest | | — | | | 0.4 | | | 0.6 | | | 0.7 | |
| Net Income (Loss) Attributable to A&B Shareholders | | $ | (4.7) | | | $ | (0.8) | | | $ | 1.5 | | | $ | 8.2 | |
1 Commercial Real Estate segment operating profit (loss) includes intersegment operating revenue, primarily from the Materials & Construction segment, and is eliminated in the consolidated results of operations.
2 Land Operations segment operating profit (loss) includes equity in earnings (losses) from the Company's various real estate joint ventures and non-cash reductions related to the Company's solar tax equity investments.
| | | | | | | | | | | | | | |
| | June 30,
2020 | | December 31, 2019 |
| Identifiable Assets: | | | | |
| Commercial Real Estate | | $ | 1,515.5 | | | $ | 1,532.6 | |
| Land Operations | | 268.1 | | | 282.5 | |
| Materials & Construction | | 218.1 | | | 243.0 | |
| Other | | 104.5 | | | 26.2 | |
| Total assets | | $ | 2,106.2 | | | $ | 2,084.3 | |
Alexander & Baldwin, Inc.
Financial Summary
Table 4 – Condensed Consolidated Statements of Cash Flows
($ in millions, unaudited)
| | | | | | | | | | | |
| Six Months Ended June 30, | | |
| 2020 | | 2019 |
| Cash Flows from Operating Activities: | | | |
| Net income (loss) | $ | 0.9 | | | $ | 7.5 | |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: | | | |
| Depreciation and amortization | 27.4 | | | 23.4 | |
| | | |
| Loss (gain) from disposals and asset transactions, net | (0.5) | | | (2.5) | |
| Impairment of assets | 5.6 | | | — | |
| Share-based compensation expense | 3.0 | | | 2.7 | |
| (Income) loss from affiliates, net of distributions of income | (2.9) | | | (1.4) | |
| Changes in operating assets and liabilities: | | | |
| Trade, contracts retention, and other contract receivables | 0.1 | | | (11.0) | |
| Inventories | 0.3 | | | (1.7) | |
| Prepaid expenses, income tax receivable and other assets | 14.3 | | | 31.4 | |
| Development/other property inventory | 0.7 | | | 41.4 | |
| Accrued pension and post-retirement benefits | 1.3 | | | 3.1 | |
| Accounts payable | (3.7) | | | (10.4) | |
| Accrued and other liabilities | (18.3) | | | (1.4) | |
| Net cash provided by (used in) operations | 28.2 | | | 81.1 | |
| | | |
| Cash Flows from Investing Activities: | | | |
| Capital expenditures for acquisitions | — | | | (218.4) | |
| Capital expenditures for property, plant and equipment | (10.9) | | | (27.4) | |
| Proceeds from disposal of property, investments and other assets | 9.4 | | | 3.0 | |
| Payments for purchases of investments in affiliates and other investments | — | | | (3.3) | |
| Distributions of capital from investments in affiliates and other investments | 5.3 | | | 10.6 | |
| Net cash provided by (used in) investing activities | 3.8 | | | (235.5) | |
| | | |
| Cash Flows from Financing Activities: | | | |
| Proceeds from issuance of notes payable and other debt | 173.0 | | | 53.9 | |
| Payments of notes payable and other debt and deferred financing costs | (100.5) | | | (109.2) | |
| Borrowings (payments) on line-of-credit agreement, net | (8.7) | | | 4.0 | |
| | | |
| Cash dividends paid | (13.8) | | | (22.4) | |
| Proceeds from issuance (repurchase) of capital stock and other, net | (1.0) | | | (1.1) | |
| Net cash provided by (used in) financing activities | 49.0 | | | (74.8) | |
| | | |
| Cash, Cash Equivalents and Restricted Cash | | | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 81.0 | | | (229.2) | |
| Balance, beginning of period | 15.4 | | | 234.9 | |
| Balance, end of period | $ | 96.4 | | | $ | 5.7 | |
Alexander & Baldwin, Inc.
Financial Summary
Table 5 – Debt Summary
As of June 30, 2020
($ in millions, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Principal Outstanding | | | | | | | | | | |
| Debt | Interest Rate (%) | Weighted-average Interest Rate (%) | Maturity Date | Weighted-average Maturity (Years) | | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total Principal | | Unamort Deferred Fin Cost/ (Discount) Premium | | Total |
| Secured: | | | | | | | | | | | | | | | | |
| Kailua Town Center | (1) | 5.95% | 2021 | 1.3 | | $ | 0.2 | | $ | 9.8 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 10.0 | | | $ | (0.1) | | | $ | 9.9 | |
| Kailua Town Center #2 | 3.15% | 3.15% | 2021 | 1.1 | | — | | 4.5 | | — | | — | | — | | — | | 4.5 | | | — | | | 4.5 | |
| Heavy Equipment Financing | (2) | 4.59% | (2) | 1.5 | | 0.6 | | 1.2 | | 0.9 | | 0.6 | | 0.1 | | — | | 3.4 | | | — | | | 3.4 | |
| Laulani Village | 3.93% | 3.93% | 2024 | 3.7 | | 0.6 | | 1.1 | | 1.1 | | 1.2 | | 57.9 | | — | | 61.9 | | | (0.6) | | | 61.3 | |
| Pearl Highlands | 4.15% | 4.15% | 2024 | 4.3 | | 1.1 | | 2.0 | | 2.1 | | 2.2 | | 75.1 | | — | | 82.5 | | | 0.7 | | | 83.2 | |
| Manoa Marketplace | (3) | 3.14% | 2029 | 7.9 | | 0.8 | | 1.7 | | 1.7 | | 1.8 | | 1.8 | | 50.9 | | 58.7 | | | (0.3) | | | 58.4 | |
| Subtotal / Wtd Ave | | 3.89% | | 4.9 | | $ | 3.3 | | $ | 20.3 | | $ | 5.8 | | $ | 5.8 | | $ | 134.9 | | $ | 50.9 | | $ | 221.0 | | | $ | (0.3) | | | $ | 220.7 | |
| | | | | | | | | | | | | | | | |
| Unsecured: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Bank syndicated loan | (4) | 3.15% | 2023 | 2.7 | | $ | — | | $ | — | | $ | — | | $ | 50.0 | | $ | — | | $ | — | | $ | 50.0 | | | $ | — | | | $ | 50.0 | |
| Series A Note | 5.53% | 5.53% | 2024 | 2.6 | | — | | 7.1 | | 7.1 | | 7.1 | | 7.2 | | — | | 28.5 | | | — | | | 28.5 | |
| Series J Note | 4.66% | 4.66% | 2025 | 4.8 | | — | | — | | — | | — | | — | | 10.0 | | 10.0 | | | — | | | 10.0 | |
| Series B Note | 5.55% | 5.55% | 2026 | 3.4 | | — | | 1.0 | | 9.0 | | 9.0 | | 9.0 | | 18.0 | | 46.0 | | | — | | | 46.0 | |
| Series C Note | 5.56% | 5.56% | 2026 | 3.0 | | 1.0 | | 9.0 | | 2.0 | | 2.0 | | 2.0 | | 7.0 | | 23.0 | | | — | | | 23.0 | |
| Series F Note | 4.35% | 4.35% | 2026 | 3.4 | | 2.4 | | 4.5 | | — | | 5.5 | | 2.4 | | 7.2 | | 22.0 | | | — | | | 22.0 | |
| Series H Note | 4.04% | 4.04% | 2026 | 6.4 | | — | | — | | — | | — | | — | | 50.0 | | 50.0 | | | — | | | 50.0 | |
| Series K Note | 4.81% | 4.81% | 2027 | 6.8 | | — | | — | | — | | — | | — | | 34.5 | | 34.5 | | | (0.1) | | | 34.4 | |
| Series G Note | 3.88% | 3.88% | 2027 | 4.1 | | 5.4 | | 1.5 | | 6.0 | | 5.0 | | 1.5 | | 15.6 | | 35.0 | | | — | | | 35.0 | |
| Series L Note | 4.89% | 4.89% | 2028 | 7.8 | | — | | — | | — | | — | | — | | 18.0 | | 18.0 | | | — | | | 18.0 | |
| Series I Note | 4.16% | 4.16% | 2028 | 8.5 | | — | | — | | — | | — | | — | | 25.0 | | 25.0 | | | — | | | 25.0 | |
| Term Loan 5 | 4.30% | 4.30% | 2029 | 9.5 | | — | | — | | — | | — | | — | | 25.0 | | 25.0 | | | — | | | 25.0 | |
| Subtotal / Wtd Ave | | 4.48% | | 5.0 | | $ | 8.8 | | $ | 23.1 | | $ | 24.1 | | $ | 78.6 | | $ | 22.1 | | $ | 210.3 | | $ | 367.0 | | | $ | (0.1) | | | $ | 366.9 | |
| | | | | | | | | | | | | | | | |
| Revolving Credit Facilities: | | | | | | | | | | | | | | | | |
| GLP Asphalt revolving credit facility | (5) | 1.58% | 2020 | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | $ | — | | | $ | — | |
| A&B Revolver | (6) | 1.98% | 2022 | 2.5 | | — | | — | | 181.0 | | — | | — | | — | | 181.0 | | | — | | | 181.0 | |
| Subtotal / Wtd Ave | | 1.83% | | 2.5 | | $ | — | | $ | — | | $ | 181.0 | | $ | — | | $ | — | | $ | — | | $ | 181.0 | | | $ | — | | | $ | 181.0 | |
| Total / Wtd Ave | | 3.69% | | 4.4 | | $ | 12.1 | | $ | 43.4 | | $ | 210.9 | | $ | 84.4 | | $ | 157.0 | | $ | 261.2 | | $ | 769.0 | | | $ | (0.4) | | | $ | 768.6 | |
| | | | | | | | | | | | | | | | |
| (1) Loan has a stated interest rate of LIBOR plus 1.50%, but is swapped through maturity to a 5.95% fixed rate. | | | | | | | | | | | | | | | | |
| (2) Loans have stated rates ranging from 4.08% to 5.00% and stated maturity dates ranging from 2021 to 2024. | | | | | | | | | | | | | | | | |
| (3) Loan has a stated interest rate of LIBOR plus 1.35%, but is swapped through maturity to a 3.14% fixed rate. | | | | | | | | | | | | | | | | |
| (4) Loan has a stated interest rate of LIBOR plus 1.80% but is swapped through maturity to a 3.15% fixed rate. | | | | | | | | | | | | | | | | |
| (5) Loan has a stated interest rate of LIBOR plus 1.25%. | | | | | | | | | | | | | | | | |
| (6) Loan has a stated interest rate of LIBOR plus 1.85% based on pricing grid. | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Alexander & Baldwin, Inc.
Financial Summary
Table 6 – Capitalization & Financial Ratios
As of June 30, 2020
($ in millions, except number of shares and stock price; unaudited)
| | | | | | | | | | | |
| Debt | | | |
| Secured debt | | | $ | 220.7 | |
| Unsecured term debt | | | 366.9 | |
| Unsecured revolving credit facility | | | 181.0 | |
| Total debt (A) | | | 768.6 | |
| Add: Net unamortized deferred financing cost / discount (premium) | | | 0.4 | |
| Less: Cash and cash equivalents | | | (96.2) | |
| Net Debt | | | $ | 672.8 | |
| | | |
| Market Capitalization | Shares | Stock Price | Market Value |
| Common stock (NYSE:ALEX) | 72,348,218 | $12.19 | $ | 881.9 | |
| Total market capitalization (B) | | | $ | 881.9 | |
| | | |
| Total Capitalization (C) = (A) + (B) | | | $ | 1,650.5 | |
| Total debt to total capitalization (A) / (C) | | | 47 | % |
| | | |
| Liquidity | | | |
| Cash on hand | | | $ | 96.2 | |
| Unused committed line of credit | | | 267.9 | |
| Total liquidity | | | $ | 364.1 | |
| | | |
| Financial Ratios | | | |
Net Debt to TTM Consolidated Adjusted EBITDA1 | | | 7.1 | |
Debt-service Coverage Ratio2 | | | 2.1 | |
| Fixed-rate debt to total debt | | | 76.0 | % |
Unencumbered CRE Property Ratio3 | | | 75.4 | % |
1 Consolidated Adjusted EBITDA for the trailing twelve months is $95.4 million and is calculated on Table 7.
2 The ratio of Consolidated Adjusted EBITDA ($95.4 million) to the sum of debt service (which includes interest expense, principal payments for financing leases and term debt, as well as principal amortization of mortgage debt, and excludes balloon payments, or $46.0 million) for the trailing twelve months.
3 Measured using gross book value, represents unencumbered CRE property ($1,149.8 million) as a percent of total CRE property ($1,524.7 million).
Alexander & Baldwin, Inc.
Financial Summary
Table 7 – Consolidated Metrics
($ in millions, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated EBITDA & Consolidated Adjusted EBITDA | | | | | | | | | | |
| | | | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | | | TTM June 30, |
| | 2020 | | 2019 | | 2020 | | 2019 | | 2020 |
| Net Income (Loss) | | $ | (4.7) | | | $ | (1.2) | | | $ | 0.9 | | | $ | 7.5 | | | $ | (45.0) | |
| Adjustments: | | | | | | | | | | |
| Depreciation and amortization | | 13.8 | | | 12.5 | | | 27.4 | | | 23.4 | | | 54.5 | |
| Interest expense | | 7.8 | | | 8.1 | | | 15.6 | | | 17.2 | | | 31.5 | |
| Income tax expense (benefit) | | — | | | — | | | — | | | (1.1) | | | (0.9) | |
| Consolidated EBITDA | | $ | 16.9 | | | $ | 19.4 | | | $ | 43.9 | | | $ | 47.0 | | | $ | 40.1 | |
| Asset impairments related to the Materials & Construction segment | | 5.6 | | | — | | | 5.6 | | | — | | | 55.3 | |
| Consolidated Adjusted EBITDA | | $ | 22.5 | | | $ | 19.4 | | | $ | 49.5 | | | $ | 47.0 | | | $ | 95.4 | |
| | | | | | | | | | |
| Other discrete items impacting the respective periods - income/(loss): | | | | | | | | | | |
| Income (loss) attributable to noncontrolling interest | | $ | — | | | $ | (0.4) | | | $ | (0.6) | | | $ | (0.7) | | | $ | (1.9) | |
| Income (loss) from discontinued operations before interest, income taxes and depreciation and amortization | | (0.6) | | | 0.1 | | | (0.8) | | | (0.7) | | | (1.6) | |
| Goodwill and other long-lived asset impairments | | (5.6) | | | — | | | (5.6) | | | — | | | (55.3) | |
| | | | | | | | | | |
| Gain (loss) on disposal of assets | | — | | | — | | | 0.5 | | | — | | | 0.5 | |
| Gain (loss) on bulk agricultural land sale | | — | | | — | | | — | | | 6.7 | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated SG&A | | | | | | | | |
| | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | |
| | 2020 | | 2019 | | 2020 | | 2019 |
| Commercial Real Estate | | $ | 1.8 | | | $ | 3.0 | | | $ | 3.9 | | | $ | 5.5 | |
| Land Operations | | 1.1 | | | 1.2 | | | 2.3 | | | 2.6 | |
| Materials & Construction | | 3.9 | | | 6.0 | | | 8.4 | | | 11.7 | |
| Corporate | | 2.2 | | | 6.0 | | | 8.2 | | | 12.0 | |
| Selling, general and administrative | | $ | 9.0 | | | $ | 16.2 | | | $ | 22.8 | | | $ | 31.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| FFO & Core FFO | | | | | | | | |
| | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | |
| | 2020 | | 2019 | | 2020 | | 2019 |
| Net income (loss) available to A&B common shareholders | | $ | (4.7) | | | $ | (0.8) | | | $ | 1.5 | | | $ | 8.2 | |
| Depreciation and amortization of commercial real estate properties | | 10.6 | | | 9.1 | | | 20.8 | | | 16.5 | |
| Gain on the sale of commercial real estate properties | | — | | | — | | | (0.5) | | | — | |
| | | | | | | | |
| FFO | | 5.9 | | | 8.3 | | | 21.8 | | | 24.7 | |
| Exclude items not related to core business: | | | | | | | | |
| Land Operations Operating Profit | | (4.7) | | | (0.5) | | | (9.7) | | | (13.1) | |
| Materials & Construction Operating Loss | | 7.6 | | | 4.3 | | | 11.4 | | | 8.8 | |
| Loss from discontinued operations | | 0.6 | | | (0.1) | | | 0.8 | | | 0.7 | |
| Income (loss) attributable to noncontrolling interest | | — | | | (0.4) | | | (0.6) | | | (0.7) | |
| Income tax expense (benefit) | | — | | | — | | | — | | | (1.1) | |
| | | | | | | | |
| | | | | | | | |
| Non-core business interest expense | | 3.7 | | | 4.0 | | | 7.7 | | | 8.8 | |
| Core FFO | | $ | 13.1 | | | $ | 15.6 | | | $ | 31.4 | | | $ | 28.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| CRE Operating Profit | | $ | 8.9 | | | $ | 17.0 | | | $ | 26.9 | | | $ | 32.6 | |
| Depreciation and amortization of commercial real estate properties | | 10.6 | | | 9.1 | | | 20.8 | | | 16.5 | |
| Corporate and other expense | | (2.3) | | | (6.4) | | | (8.4) | | | (12.6) | |
| Core business interest expense | | (4.1) | | | (4.1) | | | (7.9) | | | (8.4) | |
| Core FFO | | $ | 13.1 | | | $ | 15.6 | | | $ | 31.4 | | | $ | 28.1 | |
| | | | | | | | |
| Net income available to A&B common shareholders per diluted share | | $ | (0.07) | | | $ | (0.01) | | | $ | 0.02 | | | $ | 0.11 | |
| FFO per diluted share | | $ | 0.08 | | | $ | 0.11 | | | $ | 0.30 | | | $ | 0.34 | |
| Core FFO per diluted share | | $ | 0.18 | | | $ | 0.22 | | | $ | 0.43 | | | $ | 0.39 | |
| Weighted average diluted shares outstanding (FFO) | | 72.4 | | | 72.5 | | | 72.4 | | | 72.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other discrete items impacting the respective periods - income/(loss): | | | | | | | | |
| CRE segment straight-line lease adjustments | | $ | (1.3) | | | $ | 1.7 | | | $ | (0.5) | | | $ | 2.7 | |
| CRE segment favorable/(unfavorable) lease amortization | | 0.5 | | | 0.5 | | | 0.7 | | | 0.9 | |
| Consolidated stock based compensation | | 2.4 | | | 3.0 | | | (3.0) | | | (2.7) | |
| | | | | | | | |
| CRE segment capital expenditures: | | | | | | | | |
| Property acquisitions | | $ | — | | | $ | 176.0 | | | $ | — | | | $ | 218.4 | |
| Development and redevelopment | | 2.0 | | | 5.1 | | | 5.5 | | | 16.8 | |
| Building/area improvements (Maintenance Capital Expenditures) | | 1.0 | | | 2.7 | | | 2.3 | | | 4.8 | |
| Tenant space improvements (Maintenance Capital Expenditures) | | 0.6 | | | 0.5 | | | 1.3 | | | 1.4 | |
| Total CRE capital expenditures | | $ | 3.6 | | | $ | 184.3 | | | $ | 9.1 | | | $ | 241.4 | |
| | | | | | | | |
| Leasing Commissions: | | $ | 0.2 | | | $ | 1.1 | | | $ | 0.5 | | | $ | 1.7 | |
Commercial Real Estate
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 8 – CRE Metrics
($ in millions, except per-share amounts; unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | |
| | 2020 | | 2019 | | 2020 | | 2019 |
| Operating Revenues: | |
| |
| |
| |
|
| Base rents | | $ | 21.1 | | | $ | 27.7 | | | $ | 50.0 | | | $ | 52.4 | |
| Recoveries from tenants | | 10.1 | | | 8.4 | | | 20.5 | | | 18.1 | |
| Other revenues | | 2.8 | | | 3.0 | | | 6.9 | | | 5.4 | |
| Total Commercial Real Estate operating revenues | | 34.0 | | | 39.1 | | | 77.4 | | | 75.9 | |
| Operating Costs and Expenses: | | | | | | | | |
| Property operations | | 9.6 | | | 7.6 | | | 19.7 | | | 17.2 | |
| Property taxes | | 3.8 | | | 4.6 | | | 7.8 | | | 6.8 | |
| Depreciation and amortization | | 10.6 | | | 9.1 | | | 20.8 | | | 16.5 | |
| Total Commercial Real Estate operating costs and expenses | | 24.0 | | | 21.3 | | | 48.3 | | | 40.5 | |
| Selling, general and administrative | | (1.8) | | | (3.0) | | | (3.9) | | | (5.5) | |
| Intersegment operating revenues | | 0.8 | | | 0.6 | | | 1.4 | | | 1.2 | |
| | | | | | | | |
| Interest and other income (expense), net | | (0.1) | | | 1.6 | | | 0.3 | | | 1.5 | |
| Operating Profit (Loss) | | 8.9 | | | 17.0 | | | 26.9 | | | 32.6 | |
| Plus: Depreciation and amortization | | 10.6 | | | 9.1 | | | 20.8 | | | 16.5 | |
| Less: Straight-line lease adjustments | | 1.3 | | | (1.7) | | | 0.5 | | | (2.7) | |
| Less: Favorable/(unfavorable) lease amortization | | (0.5) | | | (0.5) | | | (0.7) | | | (0.9) | |
| | | | | | | | |
| Plus: Other (income)/expense, net | | 0.1 | | | (1.6) | | | (0.3) | | | (1.5) | |
| | | | | | | | |
| Plus: Selling, general, administrative and other expenses | | 1.8 | | | 3.0 | | | 3.9 | | | 5.5 | |
| NOI | | 22.2 | | | 25.3 | | | 51.1 | | | 49.5 | |
| Less: NOI from acquisitions, dispositions and other adjustments | | (3.3) | | | (2.6) | | | (7.8) | | | (3.2) | |
| Same-Store NOI | | $ | 18.9 | | | $ | 22.7 | | | $ | 43.3 | | | $ | 46.3 | |
| | | | | | | | |
| CRE segment capital expenditures: | | | | | | | | |
| Property acquisitions | | — | | | 176.0 | | | — | | | 218.4 | |
| Development and redevelopment | | 2.0 | | | 5.1 | | | 5.5 | | | 16.8 | |
| Building/area improvements (Maintenance Capital Expenditures) | | 1.0 | | | 2.7 | | | 2.3 | | | 4.8 | |
| Tenant space improvements (Maintenance Capital Expenditures) | | 0.6 | | | 0.5 | | | 1.3 | | | 1.4 | |
| Total CRE capital expenditures | | $ | 3.6 | | | $ | 184.3 | | | $ | 9.1 | | | $ | 241.4 | |
| | | | | | | | |
| Leasing Commissions: | | 0.2 | | | 1.1 | | | 0.5 | | | 1.7 | |
| | | | | | | | |
1 Represents intersegment revenues, primarily base rents and expense recoveries from leases to tenants that operate as part of the Materials & Construction segment. These operating revenues, and the related rental expense incurred by these tenants, are eliminated in the consolidated results of operations. | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | |
| | 2020 | | 2019 | | 2020 | | 2019 |
| Commercial Real Estate Operating Profit (Loss) | | $ | 8.9 | | | $ | 17.0 | | | $ | 26.9 | | | $ | 32.6 | |
| Depreciation and amortization | | 10.6 | | | 9.1 | | | 20.8 | | | 16.5 | |
| Commercial Real Estate EBITDA | | $ | 19.5 | | | $ | 26.1 | | | $ | 47.7 | | | $ | 49.1 | |
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 9 – Occupancy
(Unaudited)
| | | | | | | | | | | | | | | | | |
| Occupancy | | | | | |
| | | | | |
| As of | | As of | | Percentage Point Change |
| June 30, 2020 | | June 30, 2019 | | |
| Retail | 93.1% | | 94.9% | | (1.8) |
| Industrial | 97.6% | | 94.4% | | 3.2 |
| Office | 93.7% | | 94.3% | | (0.6) |
| Total | 94.6% | | 94.7% | | (0.1) |
| | | | | | | | | | | | | | | | | |
| Same-Store Occupancy | | | | | |
| As of | | As of | | Percentage Point Change |
| June 30, 2020 | | June 30, 2019 | | |
| Retail | 94.8% | | 95.0% | | (0.2) |
| Industrial | 97.4% | | 93.9% | | 3.5 |
| Office | 93.7% | | 94.3% | | (0.6) |
| Total | 95.6% | | 94.6% | | 1.0 |
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 10 – NOI and Same-Store NOI by Type
($ in thousands, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Portfolio NOI | | | | | | | | | |
| Three Months Ended June 30, | | | | Percentage Change | | Q2 2020 as a % of NOI | | Q2 2019 as a % of NOI |
| 2020 | | 2019 | | | | | | |
| Retail | $ | 12,702 | | | $ | 16,610 | | | (23.5)% | | 57.3% | | 65.8% |
| Industrial | 4,422 | | | 3,997 | | | 10.6% | | 19.9% | | 15.8% |
| Ground | 4,044 | | | 3,726 | | | 8.5% | | 18.2% | | 14.8% |
| Office | 1,014 | | | 959 | | | 5.7% | | 4.6% | | 3.8% |
| Total Hawai‘i Portfolio | $ | 22,182 | | | $ | 25,292 | | | (12.3)% | | 100.0% | | 100.2% |
| Other | — | | | (42) | | | NM | | —% | | (0.2)% |
| Total | $ | 22,182 | | | $ | 25,250 | | | (12.2)% | | 100.0% | | 100.0% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Same-Store NOI | | | | | | | | | |
| Three Months Ended June 30, | | | | Percentage Change | | Q2 2020 as a % of SS NOI | | Q2 2019 as a % of SS NOI |
| 2020 | | 2019 | | | | | | |
| Retail | $ | 10,863 | | | $ | 15,069 | | | (27.9)% | | 57.6% | | 66.5% |
| Industrial | 4,054 | | | 3,791 | | | 6.9% | | 21.5% | | 16.7% |
| Ground | 2,943 | | | 2,858 | | | 3.0% | | 15.6% | | 12.6% |
| Office | 1,014 | | | 958 | | | 5.8% | | 5.4% | | 4.2% |
| Total | $ | 18,874 | | | $ | 22,676 | | | (16.8)% | | 100.0% | | 100.0% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Portfolio NOI | | | | | | | | | |
| Six Months Ended June 30, | | | | Percentage Change | | YTD 2020 as a % of NOI | | YTD 2019 as a % of NOI |
| 2020 | | 2019 | | | | | | |
| Retail | $ | 31,885 | | | $ | 32,997 | | | (3.4)% | | 62.4% | | 66.7% |
| Industrial | 9,061 | | | 7,866 | | | 15.2% | | 17.7% | | 15.9% |
| Ground | 8,183 | | | 6,775 | | | 20.8% | | 16.0% | | 13.7% |
| Office | 1,992 | | | 1,881 | | | 5.9% | | 3.9% | | 3.8% |
| Total Hawai‘i Portfolio | $ | 51,121 | | | $ | 49,519 | | | 3.2% | | 100.0% | | 100.1% |
| Other | (11) | | | (50) | | | NM | | —% | | (0.1)% |
| Total | $ | 51,110 | | | $ | 49,469 | | | 3.3% | | 100.0% | | 100.0% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Same-Store NOI | | | | | | | | | |
| Six Months Ended June 30, | | | | Percentage Change | | YTD 2020 as a % of SS NOI | | YTD 2019 as a % of SS NOI |
| 2020 | | 2019 | | | | | | |
| Retail | $ | 27,018 | | | $ | 30,853 | | | (12.4)% | | 62.4% | | 66.7% |
| Industrial | 8,321 | | | 7,660 | | | 8.6% | | 19.2% | | 16.6% |
| Ground | 5,997 | | | 5,871 | | | 2.1% | | 13.8% | | 12.7% |
| Office | 1,992 | | | 1,880 | | | 6.0% | | 4.6% | | 4.1% |
| Total | $ | 43,328 | | | $ | 46,264 | | | (6.3)% | | 100.0% | | 100.1% |
Changes in the Same-Store pool as it relates to the comparable prior period and the current period are as follows:
| | | | | | | | |
| | | Additions | |
| | | Date | Property |
| | | 1/20 | Lau Hala Shops |
| | | 1/20 | Opule Industrial |
| | | 1/20 | The Collection |
| | | 1/20 | Laulani Village |
| | | 1/20 | Hokulei Village |
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 11 – Improved Property Report
($ in thousands, except per square foot amounts; unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property | | Island | Year Built/
Renovated | Current
GLA (SF) | Occupancy | ABR | ABR
PSF | Q2 2020 NOI | Q2 2020 % NOI to Improved Portfolio NOI | Retail Anchor Tenants |
| Retail: | | | | | | | | | | |
| 1 | Pearl Highlands Center | (1) | Oahu | 1992-1994 | 411,400 | | 96.7 % | $ | 10,905 | | $ | 27.42 | | $ | 1,993 | | 11.0 | % | Sam's Club, Regal Cinemas, 24 Hour Fitness, Ulta Salon |
| 2 | Kailua Retail | (1) | Oahu | 1947-2014 | 319,100 | | 96.5 % | 11,303 | | 37.33 | | 2,168 | | 12.0 | % | Whole Foods Market, Foodland, CVS/Longs Drugs, Ulta Salon |
| 3 | Laulani Village | (1) | Oahu | 2012 | 175,900 | | 97.5 % | 6,518 | | 37.98 | | 1,432 | | 7.9 | % | Safeway, Ross, Walgreens, Petco |
| 4 | Waianae Mall | (1) | Oahu | 1975 | 170,300 | | 92.7 % | 3,055 | | 20.95 | | 496 | | 2.7 | % | CVS/Longs Drugs, City Mill |
| 5 | Manoa Marketplace | (1) | Oahu | 1977 | 141,400 | | 86.8 % | 4,019 | | 34.10 | | 825 | | 4.5 | % | Safeway, CVS/Longs Drugs |
| 6 | Queens' MarketPlace | | Hawai‘i Island | 2007 | 134,700 | | 91.0 % | 5,369 | | 53.16 | | 215 | | 1.2 | % | Island Gourmet |
| 7 | Kaneohe Bay Shopping Center (Leasehold) | (1) | Oahu | 1971 | 125,400 | | 100.0 % | 3,172 | | 25.29 | | 558 | | 3.1 | % | Safeway, CVS/Longs Drugs |
| 8 | Pu‘unene Shopping Center | | Maui | 2017 | 120,500 | | 64.6 % | 3,737 | | 47.98 | | 787 | | 4.3 | % | Planet Fitness, Petco, Ulta Salon, Target (shadow-anchored) |
| 9 | Hokulei Village | (1) | Kauai | 2015 | 119,200 | | 96.4 % | 4,095 | | 35.63 | | 977 | | 5.4 | % | Safeway, Petco |
| 10 | Waipio Shopping Center | (1) | Oahu | 1986, 2004 | 113,800 | | 99.7 % | 3,351 | | 29.54 | | 877 | | 4.8 | % | Foodland |
| 11 | Aikahi Park Shopping Center | (1) | Oahu | 1971 | 98,100 | | 90.7 % | 2,048 | | 25.16 | | 505 | | 2.8 | % | Safeway |
| 12 | Lanihau Marketplace | (1) | Hawai‘i Island | 1987 | 88,300 | | 90.4 % | 1,594 | | 19.97 | | 241 | | 1.3 | % | Sak' N Save, CVS/Longs Drugs |
| 13 | The Shops at Kukui‘ula | (1) | Kauai | 2009 | 86,100 | | 89.7 % | 3,878 | | 53.51 | | (189) | | (0.9) | % | CVS/Longs Drugs, Eating House, Living Foods Market |
| 14 | Kunia Shopping Center | (1) | Oahu | 2004 | 60,600 | | 93.4 % | 2,308 | | 40.80 | | 374 | | 2.1 | % | |
| 15 | Waipouli Town Center | | Kauai | 1980 | 56,600 | | 93.9 % | 949 | | 17.86 | | 244 | | 1.3 | % | Foodland |
| 16 | Lau Hala Shops | (1) | Oahu | 2018 | 46,300 | | 100.0 % | 2,715 | | 58.68 | | 99 | | 0.5 | % | UFC Gym, Down to Earth |
| 17 | Napili Plaza | (1) | Maui | 1991 | 45,600 | | 87.6 % | 1,247 | | 31.21 | | 205 | | 1.1 | % | Napili Market |
| 18 | Kahului Shopping Center | (1) | Maui | 1951 | 45,300 | | 93.6 % | 678 | | 15.98 | | 68 | | 0.4 | % | |
| 19 | Gateway at Mililani Mauka | (1) | Oahu | 2008, 2013 | 34,900 | | 90.6 % | 1,802 | | 57.07 | | 352 | | 1.9 | % | CVS/Longs Drugs (shadow-anchored) |
| 20 | Port Allen Marina Center | (1) | Kauai | 2002 | 23,600 | | 92.0 % | 601 | | 27.73 | | 50 | | 0.3 | % | |
| 21 | The Collection | (1) | Oahu | 2017 | 5,900 | | 100.0 % | 304 | | 51.53 | | (168) | | (0.9) | % | |
| 22 | Ho‘okele Shopping Center | (2) | Maui | 2019 | 71,400 | | N/A | — | | — | | 593 | | 3.3 | % | Safeway |
| Subtotal – Retail | | | | 2,494,400 | | 93.1 | % | $ | 73,648 | | $ | 33.48 | | $ | 12,702 | | 70.1 | % | |
| | | | | | | | | | | |
| Industrial: | | | | | | | | | | |
| 23 | Komohana Industrial Park | (1) | Oahu | 1990 | 238,300 | | 100.0 % | $ | 3,322 | | $ | 13.94 | | $ | 1,258 | | 6.9 | % | |
| 24 | Kaka‘ako Commerce Center | (1) | Oahu | 1969 | 201,100 | | 91.4 % | 2,631 | | 14.32 | | 439 | | 2.4 | % | |
| 25 | Waipio Industrial | (1) | Oahu | 1988-1989 | 158,400 | | 98.8 % | 2,547 | | 16.27 | | 598 | | 3.3 | % | |
| 26 | Opule Industrial | (1) | Oahu | 2005-2006, 2018 | 151,500 | | 100.0 % | 2,374 | | 15.67 | | 612 | | 3.4 | % | |
| 27 | P&L Warehouse | (1) | Maui | 1970 | 104,100 | | 100.0 % | 1,475 | | 14.73 | | 382 | | 2.1 | % | |
| 28 | Kapolei Enterprise Center | | Oahu | 2019 | 93,000 | | 100.0 % | 1,507 | | 16.19 | | 367 | | 2.0 | % | |
| 29 | Honokohau Industrial | (1) | Hawai‘i Island | 2004-2006, 2008 | 86,500 | | 100.0 % | 1,224 | | 14.15 | | 269 | | 1.5 | % | |
| 30 | Kailua Industrial/Other | (1) | Oahu | 1951-1974 | 69,000 | | 92.5 % | 1,118 | | 18.06 | | 221 | | 1.2 | % | |
| 31 | Port Allen | (1) | Kauai | 1983, 1993 | 63,800 | | 100.0 % | 753 | | 11.80 | | 133 | | 0.7 | % | |
| 32 | Harbor Industrial | (1) | Maui | 1930 | 51,100 | | 90.2 % | 530 | | 12.41 | | 143 | | 0.8 | % | |
| Subtotal – Industrial | | | | 1,216,800 | | 97.6 | % | $ | 17,481 | | $ | 14.84 | | $ | 4,422 | | 24.3 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property | | Island | Year Built/
Renovated | Current
GLA (SF) | Occupancy | ABR | ABR
PSF | Q2 2020 NOI | Q2 2020 % NOI to Improved Portfolio NOI | Retail Anchor Tenants |
| | | | | | | | | | | |
| Office: | | | | | | | | | | |
| 33 | Kahului Office Building | (1) | Maui | 1974 | 59,400 | | 89.9 % | $ | 1,537 | | $ | 30.40 | | $ | 382 | | 2.1 | % | |
| 34 | Gateway at Mililani Mauka South | (1) | Oahu | 1992, 2006 | 37,100 | | 100.0 % | 1,560 | | 44.38 | | 398 | | 2.2 | % | |
| 35 | Kahului Office Center | (1) | Maui | 1991 | 33,400 | | 94.2 % | 805 | | 25.56 | | 194 | | 1.1 | % | |
| 36 | Lono Center | (1) | Maui | 1973 | 13,700 | | 92.3 % | 316 | | 25.06 | | 40 | | 0.2 | % | |
| Subtotal – Office | | | | 143,600 | | 93.7 | % | $ | 4,218 | | $ | 32.49 | | $ | 1,014 | | 5.6 | % | |
| Total – Hawai‘i Improved Portfolio | | | | 3,854,800 | | 94.6 | % | $ | 95,347 | | $ | 27.18 | | $ | 18,138 | | 100.0 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) Included in the Same-Store pool. | | | | | | | | | | |
| (2) Development completed but not yet stabilized. Upon initial stabilization the property will be included in Occupancy. NOI not included in Same-Store portfolio. | | | | | | | | | | |
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 12 – Ground Lease Report
($ in thousands, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property Name (1) | | Location
(City, Island) | Acres | Property Type | Exp. Year | Current ABR | 2020 NOI | Next Rent Step | Step Type | Next ABR ($ in $000) | Previous Rent Step | Previous Step Type | Previous ABR ($ in $000) |
| 1 | Windward City Shopping Center | (2) | Kaneohe, Oahu | 15.4 | Retail | 2035 | $ | 2,800 | | $ | 699 | | 2023 | FMV Reset | FMV | 2017 | Fixed Step | $ | 2,100 | |
| 2 | Owner/Operator | | Kapolei, Oahu | 36.4 | Industrial | 2025 | 2,328 | | 582 | | 2021 | Fixed Step | 3,110 | | 2020 | Fixed Step | 2,271 | |
| 3 | Owner/Operator | | Honolulu, Oahu | 9.0 | Retail | 2045 | 2,075 | | 519 | | 2025 | Fixed Step | 2,283 | | 2020 | Fixed Step | 1,886 | |
| 4 | Kaimuki Shopping Center | (2) | Honolulu, Oahu | 2.8 | Retail | 2040 | 1,728 | | 399 | | 2022 | Fixed Step | 2,039 | | 2020 | FMV Reset | 1,344 | |
| 5 | S&F Industrial | (2) | Pu'unene, Maui | 52.0 | Heavy Industrial | 2059 | 1,275 | | 355 | | 2024 | Fixed Step | 1,433 | | 2019 | Fixed Step | 751 | |
| 6 | Owner/Operator | (2) | Kaneohe, Oahu | 3.7 | Retail | 2048 | 990 | | 247 | | 2023 | Fixed Step | 1,059 | | 2018 | Option | 694 | |
| 7 | Windward Town and Country Plaza I | (2) | Kailua, Oahu | 3.4 | Retail | 2062 | 753 | | 188 | | 2022 | Fixed Step | 963 | | 2012 | FMV Reset | 160 | |
| 8 | Windward Town and Country Plaza II | (2) | Kailua, Oahu | 2.2 | Retail | 2062 | 485 | | 121 | | 2022 | Fixed Step | 621 | | 2012 | FMV Reset | unknown |
| 9 | Owner/Operator | (2) | Kailua, Oahu | 1.9 | Retail | 2034 | 450 | | 15 | | 2024 | Fixed Step | 470 | | 2019 | Negotiated | 641 | |
| 10 | Owner/Operator | (2) | Honolulu, Oahu | 0.5 | Retail | 2028 | 357 | | 90 | | 2021 | Fixed Step | 366 | | 2020 | Fixed Step | 348 | |
| 11 | Owner/Operator | (2) | Honolulu, Oahu | 0.5 | Parking | 2023 | 319 | | 80 | | 2020 | Fixed Step | 329 | | 2019 | Fixed Step | 310 | |
| 12 | Pali Palms Plaza | (2) | Kailua, Oahu | 3.3 | Office | 2037 | 259 | | 64 | | 2022 | FMV Reset | FMV | 2012 | Negotiated | 257 | |
| 13 | Seven-Eleven Kailua Center | (2) | Kailua, Oahu | 0.9 | Retail | 2033 | 248 | | 62 | | 2021 | Fixed Step | 253 | | 2020 | FMV Reset | 243 | |
| 14 | Owner/Operator | (2) | Kahului, Maui | 0.8 | Retail | 2026 | 242 | | 60 | | 2020 | Fixed Step | 249 | | 2019 | Fixed Step | 235 | |
| 15 | Owner/Operator | (2) | Kailua, Oahu | 1.2 | Retail | 2022 | 237 | | 55 | | — | | — | | — | | 2013 | FMV Reset | 120 | |
| 16 | Owner/Operator | (2) | Kahului, Maui | 0.4 | Retail | 2021 | 214 | | 53 | | 2020 | Option | 220 | | 2019 | Fixed Step | 207 | |
| 17 | Owner/Operator | (2) | Kahului, Maui | 0.8 | Industrial | 2025 | 209 | | 52 | | 2021 | Fixed Step | 218 | | 2020 | Option | 200 | |
| 18 | Owner/Operator | (2) | Kahului, Maui | 0.5 | Retail | 2029 | 173 | | 67 | | 2020 | Fixed Step | 179 | | 2019 | Fixed Step | 168 | |
| 19 | Owner/Operator | (2) | Kailua, Oahu | 0.4 | Retail | 2022 | 158 | | 39 | | 2021 | Fixed Step | 166 | | 2020 | Fixed Step | 151 | |
| 20 | Owner/Operator | (2) | Kahului, Maui | 0.4 | Retail | 2027 | 158 | | 57 | | 2022 | Fixed Step | 181 | | 2017 | Negotiated | 128 | |
| Remainder | (2) | Various | 17.3 | Various | Various | 1,502 | | 240 | | Various | Various | — | | — | | — | | — | |
| Total - Ground Leases | | | 153.8 | | | | $ | 16,960 | | $ | 4,044 | | | | | | | |
| | | | | | | | | | | | | | |
| (1) Excludes intersegment ground leases, primarily from the Materials & Construction segment, which are eliminated in the consolidated results of operations. | | | | | | | | | | | | | |
| (2) Included in Same-Store pool. | | | | | | | | | | | | | |
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 13 – Top 10 Tenants Ranked by ABR
($ in thousands, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tenant1 | Number of Leases | | ABR | | % of Total Improved
Portfolio
ABR | | GLA (SF) | | % of Total
Improved Portfolio
GLA |
| Albertsons Companies (including Safeway) | 7 | | $ | 6,920 | | | 7.2 % | | 286,024 | | | 7.4 % |
| Sam's Club | 1 | | 3,308 | | | 3.5 % | | 180,908 | | | 4.7 % |
| CVS Corporation (including Longs Drugs) | 6 | | 2,752 | | | 2.9 % | | 150,411 | | | 3.9 % |
| Foodland Supermarket & related companies | 10 | | 2,662 | | | 2.8 % | | 146,901 | | | 3.8 % |
| Ross Dress for Less | 2 | | 1,992 | | | 2.1 % | | 65,484 | | | 1.7 % |
| Coleman World Group | 2 | | 1,834 | | | 1.9 % | | 115,495 | | | 3.0 % |
GP/RM Prestress, LLC2 | 1 | | 1,584 | | | 1.6 % | | N/A | | N/A |
| 24 Hour Fitness USA | 1 | | 1,513 | | | 1.6 % | | 45,870 | | | 1.2 % |
| Ulta Salon, Cosmetics, & Fragrance, Inc. | 3 | | 1,508 | | | 1.6 % | | 33,985 | | | 0.9 % |
| Petco Animal Supplies Stores | 3 | | 1,316 | | | 1.4 % | | 34,282 | | | 0.9 % |
| Total | 36 | | | $ | 25,389 | | | 26.6 | % | | 1,059,360 | | | 27.5 | % |
| | | | | | | | | |
1 Excludes ground leases, primarily from the Materials & Construction segment. | | | | | | | | | |
2 The leased premises in the GP/RM Prestress, LLC lease is Yard space and therefore not included in GLA. | | | | | | | | | |
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 14 – Lease Expiration Schedule
As of June 30, 2020
($ in thousands, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Improved Portfolio | | | | | | | | | | |
| Expiration Year | | Number
of Leases | | Square
Footage of
Expiring Leases | | % of Total
Improved Portfolio
Leased GLA | | ABR
Expiring | | % of Total
Improved Portfolio
Expiring ABR |
| 2020 | | 75 | | 176,746 | | | 4.9% | | $ | 4,632 | | | 4.4% |
| 2021 | | 173 | | 626,601 | | | 17.5% | | 15,633 | | | 14.8% |
| 2022 | | 170 | | 413,529 | | | 11.6% | | 13,093 | | | 12.4% |
| 2023 | | 133 | | 312,943 | | | 8.7% | | 10,414 | | | 9.9% |
| 2024 | | 78 | | 406,681 | | | 11.4% | | 11,974 | | | 11.4% |
| 2025 | | 48 | | 301,002 | | | 8.4% | | 7,729 | | | 7.3% |
| 2026 | | 20 | | 178,247 | | | 5.0% | | 4,633 | | | 4.4% |
| 2027 | | 24 | | 155,882 | | | 4.4% | | 4,679 | | | 4.4% |
| 2028 | | 36 | | 236,166 | | | 6.6% | | 9,687 | | | 9.2% |
| 2029 | | 26 | | 136,626 | | | 3.8% | | 6,059 | | | 5.8% |
| Thereafter | | 33 | | 504,884 | | | 14.1% | | 13,387 | | | 12.7% |
| Month-to-month | | 104 | | 128,740 | | | 3.6% | | 3,366 | | | 3.3% |
| Total | | 920 | | 3,578,047 | | | 100.0% | | $ | 105,286 | | | 100.0% |
| | | | | | | | | | |
| Retail Portfolio | | | | | | | | | | |
| Expiration Year | | Number
of Leases | | Square
Footage of
Expiring Leases | | % of Total
Retail
Leased GLA | | ABR
Expiring | | % of Total
Retail
Expiring ABR |
| 2020 | | 50 | | 126,155 | | | 5.6% | | $ | 3,687 | | | 4.6% |
| 2021 | | 99 | | 355,201 | | | 15.7% | | 11,408 | | | 14.1% |
| 2022 | | 115 | | 222,388 | | | 9.9% | | 9,740 | | | 12.1% |
| 2023 | | 100 | | 216,631 | | | 9.6% | | 8,464 | | | 10.5% |
| 2024 | | 64 | | 335,249 | | | 14.9% | | 10,681 | | | 13.2% |
| 2025 | | 40 | | 122,851 | | | 5.4% | | 4,689 | | | 5.8% |
| 2026 | | 14 | | 23,422 | | | 1.0% | | 1,404 | | | 1.7% |
| 2027 | | 22 | | 78,290 | | | 3.5% | | 3,137 | | | 3.9% |
| 2028 | | 32 | | 191,258 | | | 8.5% | | 8,745 | | | 10.8% |
| 2029 | | 23 | | 119,165 | | | 5.3% | | 5,430 | | | 6.7% |
| Thereafter | | 27 | | 410,840 | | | 18.2% | | 11,107 | | | 13.8% |
| Month-to-month | | 59 | | 54,546 | | | 2.4% | | 2,256 | | | 2.8% |
| Total | | 645 | | 2,255,996 | | | 100.0% | | $ | 80,748 | | | 100.0% |
| | | | | | | | | | |
| Industrial Portfolio | | | | | | | | | | |
| Expiration Year | | Number
of Leases | | Square
Footage of
Expiring Leases | | % of Total
Industrial
Leased GLA | | ABR
Expiring | | % of Total
Industrial
Expiring ABR |
| 2020 | | 21 | | 47,014 | | | 4.0% | | $ | 811 | | | 4.1% |
| 2021 | | 61 | | 249,959 | | | 21.1% | | 3,604 | | | 18.3% |
| 2022 | | 44 | | 172,619 | | | 14.5% | | 2,706 | | | 13.7% |
| 2023 | | 24 | | 72,373 | | | 6.1% | | 1,129 | | | 5.7% |
| 2024 | | 9 | | 55,968 | | | 4.7% | | 890 | | | 4.5% |
| 2025 | | 5 | | 168,794 | | | 14.2% | | 2,734 | | | 13.9% |
| 2026 | | 5 | | 140,741 | | | 11.9% | | 2,416 | | | 12.3% |
| 2027 | | 1 | | 75,824 | | | 6.4% | | 1,438 | | | 7.3% |
| 2028 | | 1 | | 40,505 | | | 3.4% | | 793 | | | 4.0% |
| 2029 | | 2 | | 8,431 | | | 0.7% | | 176 | | | 0.9% |
| Thereafter | | 3 | | 86,490 | | | 7.2% | | 2,011 | | | 10.2% |
| Month-to-month | | 41 | | 68,734 | | | 5.8% | | 978 | | | 5.1% |
| Total | | 217 | | 1,187,452 | | | 100.0% | | $ | 19,686 | | | 100.0% |
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 15 – New & Renewal Lease Summary
As of June 30, 2020
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Comparable Leases Only1 | | | | |
| Total - New and Renewal | Leases | GLA | New ABR/SF | TI / SF | Wtd Ave Lease Term (Years) | Leases | GLA | New ABR/SF | Old ABR/SF | Rent Spread2 |
| 2nd Quarter 2020 | 42 | 176,535 | | $ | 26.40 | | $ | 3.96 | | 6.8 | 32 | 151,081 | | $ | 24.07 | | $ | 22.94 | | 4.9% |
| 1st Quarter 2020 | 43 | 200,454 | | $ | 18.66 | | $ | 2.47 | | 5.0 | 22 | 111,771 | | $ | 19.37 | | $ | 17.52 | | 10.6% |
| 4th Quarter 2019 | 52 | 124,021 | | $ | 28.24 | | $ | 17.11 | | 7.7 | 29 | 43,003 | | $ | 37.14 | | $ | 34.19 | | 8.6% |
| 3rd Quarter 2019 | 55 | 114,061 | | $ | 26.62 | | $ | 1.97 | | 3.7 | 35 | 77,276 | | $ | 29.72 | | $ | 28.04 | | 6.0% |
| Trailing four quarters | 192 | 615,071 | | $ | 24.29 | | $ | 5.76 | | 5.8 | 118 | 383,131 | | $ | 25.30 | | $ | 23.65 | | 7.0% |
| | | | | | | | | | |
| Total - New Leases | Leases | GLA
Unit Area | New ABR/SF | TI / SF | Wtd Ave Lease Term (Years) | Leases | GLA | New ABR/SF | Old ABR/SF | Rent Spread2 |
| 2nd Quarter 2020 | 11 | 19,871 | | $ | 41.59 | | $ | 10.04 | | 7.1 | 4 | 6,296 | | $ | 15.80 | | $ | 14.93 | | 5.8% |
| 1st Quarter 2020 | 18 | 58,384 | | $ | 20.46 | | $ | 9.52 | | 4.5 | 2 | 1,174 | | $ | 78.15 | | $ | 77.97 | | 0.2% |
| 4th Quarter 2019 | 23 | 78,101 | | $ | 22.37 | | $ | 26.71 | | 9.7 | 3 | 3,835 | | $ | 25.55 | | $ | 17.62 | | 45.0% |
| 3rd Quarter 2019 | 23 | 40,300 | | $ | 21.05 | | $ | 3.91 | | 3.2 | 6 | 7,588 | | $ | 32.76 | | $ | 31.30 | | 4.7% |
| Trailing four quarters | 75 | 196,656 | | $ | 23.47 | | $ | 15.25 | | 6.5 | 15 | 18,893 | | $ | 28.46 | | $ | 25.97 | | 9.6% |
| | | | | | | | | | |
| Total - Renewal Leases | Leases | GLA | New ABR/SF | TI / SF | Wtd Ave Lease Term (Years) | Leases | GLA | New ABR/SF | Old ABR/SF | Rent Spread2 |
| 2nd Quarter 2020 | 31 | 156,664 | | $ | 24.48 | | $ | 3.19 | | 6.8 | 28 | 144,785 | | $ | 24.43 | | $ | 23.29 | | 4.9% |
| 1st Quarter 2020 | 25 | 142,070 | | $ | 17.93 | | $ | (0.42) | | 5.2 | 20 | 110,597 | | $ | 18.75 | | $ | 16.88 | | 11.1% |
| 4th Quarter 2019 | 29 | 45,920 | | $ | 38.23 | | $ | 0.78 | | 4.3 | 26 | 39,168 | | $ | 38.27 | | $ | 35.81 | | 6.9% |
| 3rd Quarter 2019 | 32 | 73,761 | | $ | 29.66 | | $ | 0.91 | | 4.0 | 29 | 69,688 | | $ | 29.38 | | $ | 27.68 | | 6.2% |
| Trailing four quarters | 117 | 418,415 | | $ | 24.68 | | $ | 1.30 | | 5.5 | 103 | 364,238 | | $ | 25.14 | | $ | 23.53 | | 6.9% |
| | | | | | | | | | |
| | | | | | | | | | |
| Three Months Ended June 30, 2020 | | | | | TTM Ended June 30, 2020 | | | | |
| Leases | GLA | ABR/SF | Rent Spread2 | | Leases | GLA | ABR/SF | Rent Spread2 | |
| Retail | 27 | 129,964 | | $ | 27.92 | | 6.1% | Retail | 113 | 321,893 | | $ | 30.28 | | 6.8% | |
| Industrial | 12 | 32,531 | | $ | 15.70 | | 2.5% | Industrial | 59 | 241,971 | | $ | 14.94 | | 9.9% | |
| Office | 3 | 14,040 | | $ | 37.17 | | 1.6% | Office | 20 | 51,207 | | $ | 30.82 | | 2.1% | |
1 Per Glossary of Terms, Comparable Leases are renewals and leases executed for units that have been vacated in the previous 12 months. Expansions, contractions and strategic short-term renewals are excluded from the Comparable Lease pool.
2 Rent Spread is calculated for Comparable Leases, a subset of the total population of leases for the period defined.
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 16 – Portfolio Repositioning, Redevelopment & Development Summary
As of June 30, 2020
($ in millions, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Leasing Activity | | |
Project1 | Phase | Target
In-service | Target
Stabilization | Book Value of Land
& Related Costs | Total Estimated
Project Capital
Costs & Contributed Land Basis | Project Capital
Costs Incurred
to Date | Estimated
Incremental
Stabilized
NOI | Estimated
Stabilized
Yield on Total
Project Capital
Costs | Projected
GLA (SF) | %
Leased | % Under Letter of Intent | Total |
| Redevelopment | | | | | | | | | | | | |
| Aikahi Park Shopping Center | Construction | 4Q2021 | 2Q2022 | N/A | $18.0 - $18.8 | $2.4 | $1.5 - $1.7 | 8.2 - 9.0% | 98,000 | 93 | — | 93 |
| | | | | | | | | | | | |
1 During 2019, Ho‘okele Shopping Center (a center that was being developed on a parcel adjacent to Maui Business Park and was included in this table in prior periods) was divided into two phases. Phase 1, which contemplates a Safeway, gas station, and related shops, commenced operations in Q3 2019 and is included in Table 11 - Improved Property Report in this period. Phase 2 will commence development at a later time pending the attainment of lease commitments for the future space and will be considered for inclusion in this table at that future time. | | | | | | | | | | | | |
Alexander & Baldwin, Inc.
Commercial Real Estate
Table 17 – Transactional Activity (2019 - 2020)
($ in millions, unaudited)
| | | | | | | | | | | | | | | | | |
| Dispositions | | | | | |
| Property | Type | Location | Date
(Month/Year) | Sales Price | GLA (SF) |
| The Collection (Suites 2 & 3) | Retail | Oahu, HI | 2/20 | $ | 6.0 | | 6,100 | |
| Total | | | | $ | 6.0 | | 6,100 | |
| | | | | |
| | | | | |
| Acquisitions | | | | | |
| Property | Type | Location | Date
(Month/Year) | Purchase Price | GLA (SF) |
| Queens' MarketPlace | Retail | Hawai‘i Island, HI | 5/19 | $ | 90.3 | | 134,700 | |
| Waipouli Town Center | Retail | Kauai, HI | 5/19 | 17.8 | | 56,600 | |
| Kapolei Business Park West | Ground Lease | Oahu, HI | 4/19 | 41.1 | | N/A |
| Kapolei Enterprise Center | Industrial | Oahu, HI | 4/19 | 26.8 | | 93,000 | |
| Home Depot Iwilei | Ground Lease | Oahu, HI | 3/19 | 42.4 | | N/A |
| Total | | | | $ | 218.4 | | 284,300 | |
Land Operations
Alexander & Baldwin, Inc.
Land Operations
Table 18 – Statement of Operating Profit and EBITDA
($ in millions, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | |
| | 2020 | | 2019 | | 2020 | | 2019 |
| Development sales revenue | | $ | 2.3 | | | $ | 18.1 | | | $ | 5.9 | | | $ | 30.4 | |
| Unimproved/other property sales revenue | | 1.6 | | | 0.4 | | | 3.7 | | | 30.9 | |
Other operating revenue1 | | 5.9 | | | 6.4 | | | 11.7 | | | 12.6 | |
| Total Land Operations operating revenue | | $ | 9.8 | | | $ | 24.9 | | | $ | 21.3 | | | $ | 73.9 | |
| Land Operations operating costs and expenses | | (2.9) | | | (23.2) | | | (11.0) | | | (62.6) | |
| Selling, general and administrative | | (1.2) | | | (1.2) | | | (2.4) | | | (2.6) | |
| Earnings (loss) from joint ventures | | (0.7) | | | 0.8 | | | 2.3 | | | 3.4 | |
| Interest and other income (expense), net | | (0.3) | | | (0.8) | | | (0.5) | | | 1.0 | |
| Total Land Operations operating profit (loss) | | $ | 4.7 | | | $ | 0.5 | | | $ | 9.7 | | | $ | 13.1 | |
1 Other operating revenue includes revenue related to trucking, renewable energy and diversified agriculture.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | | Six Months Ended June 30, | | | | TTM June 30, |
| | 2020 | | 2019 | | 2020 | | 2019 | | 2020 |
| Land Operations Operating Profit (Loss) | | $ | 4.7 | | | $ | 0.5 | | | $ | 9.7 | | | $ | 13.1 | | | $ | 17.4 | |
| Land Operations depreciation and amortization | | 0.4 | | | 0.4 | | | 0.8 | | | 0.8 | | | 1.6 | |
| Land Operations EBITDA | | $ | 5.1 | | | $ | 0.9 | | | $ | 10.5 | | | $ | 13.9 | | | $ | 19.0 | |
Alexander & Baldwin, Inc.
Land Operations
Table 19 – Key Active Development-for-sale Projects and Investments
As of June 30, 2020
($ in millions except per square foot and per unit amounts, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Construction Timing | | | Sales Closing Timing | |
| Project | Location | Product
Type | Est. Economic Interest1 | Planned
Units or
Saleable
Acres | Avg
Size of Remaining
Units (SF)
or Lots
(Acres) | Units /
Acres
Closed | Unit /
Acres
Remaining | Target
Sales Price
Range
per SF / per Unit for Remaining | Est. Total Project Cost / Investment Cost2 | A&B Projected Capital Commitment3 | Total
Project
Costs
Incurred
to Date | A&B Gross
Investment
(Life to Date) | A&B Net
Book Value | | Start /
Est. Start | Est.
Substantial
Completion | | Start /
Est. Start | Est. End |
Maui Business Park
(Phase II) | Kahului,
Maui | Light
industrial
lots | 100% | 116.0 | 1.2 acres | 49 acres | 67 acres | $38-$60 per SF | $ | 91 | | N/A | $ | 67 | | $ | 67 | | $ | 34 | | | 2011 | 2021 | | 2012 | 2030+ |
| Kukui‘ula | Poipu,
Kauai | Resort
residential | 80% +/- 5% | 1,425 units | N/A | 221 units | 1,204 units | $1.1M per unit | $ | 1,071 | | $ | 343 | | $ | 651 | | $ | 323 | | $ | 117 | | | 2006 | 2041 | | 2006 | 2042 |
Other Kukui‘ula Related Investments 4 5 | Poipu,
Kauai | Resort
residential | 75% +/- 5% | 58 units | N/A | 46 units | 12 units | $2.0M per unit | $ | 102 | | $ | 53 | | $ | 79 | | $ | 52 | | $ | 19 | | | 2012 | 2018 | | 2013 | 2021 |
| | | | | | | | | | | | | | | | | | | |
1 Estimated economic interest represents the Company's estimated share of distributions after return of capital contributions based on current forecasts of sales activity. Actual results could differ materially from projected results due to the timing of expected sales, increases or decreases in estimated sales prices or costs and other factors. As a result, estimated economic interests are subject to change. Further, as it relates to certain of our joint venture projects, information disclosed herein is obtained from our joint venture partners, who maintain the books and records of the related ventures. | | | | | | | | | | | | | | | | | | | |
2 Includes land cost at book value, including capitalized interest, but excluding sales commissions and closing costs. | | | | | | | | | | | | | | | | | | | |
3 Includes land cost at contribution value and total expected A&B capital to be contributed. The estimate includes due diligence costs and capitalized interest, but excludes capital projected to be contributed by equity partners, third-party debt, and amounts expected to be funded from project cash flows and/or buyer deposits. | | | | | | | | | | | | | | | | | | | |
4 Includes two joint venture investments in vertical construction, development-for-sale projects at Kukui‘ula, as well as notes receivable from a Kukui‘ula development-for-sale project. | | | | | | | | | | | | | | | | | | | |
5 In 2019, management of the joint venture investments revise its strategic plan for the future development and marketing of land and units in the project. Such process resulted in an increase to the total planned units for the project and also project cost as well as the expected sales closing estimated end dates. | | | | | | | | | | | | | | | | | | | |
Alexander & Baldwin, Inc.
Land Operations
Table 20 – Landholdings as of June 30, 2020
(In acres, unaudited)
| | | | | | | | | | | | | | | | |
| Type | Kauai | Maui | Oahu | | | Total Acres |
| Land used in other operations | 20 | 21 | — | | | 41 |
| Urban land, not in active development/use | | | | | | |
| Urban Developable, with full or partial infrastructure | 6 | 110 | — | | | 116 |
| Urban Developable, with limited or no infrastructure | 29 | 186 | — | | | 215 |
| Urban Other | 6 | 23 | — | | | 29 |
| Subtotal - Urban land, not in active development | 41 | 319 | — | | | 360 |
| Agriculture-related | | | | | | |
| Agriculture/Other | 6,155 | 6,187 | 75 | | | 12,417 |
| Urban entitlement process | 260 | 357 | — | | | 617 |
| Conservation & preservation | 12,488 | 392 | 509 | | | 13,389 |
| Subtotal - Agriculture-related | 18,903 | 6,936 | 584 | | | 26,423 |
| Total Land Operations Landholdings | 18,964 | 7,276 | 584 | | | 26,824 |
| | | | | | |
| | | | | | |
| | | | | | |
Materials & Construction
Alexander & Baldwin, Inc.
Materials & Construction
Table 21 – Statement of Operating Profit, EBITDA and Adjusted EBITDA
($ in millions, unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | | | Six Months Ended June 30, | | | | TTM June 30, |
| 2020 | | 2019 | | 2020 | | 2019 | | 2020 |
Operating Profit (Loss)1 | $ | (7.6) | | | $ | (4.3) | | | $ | (11.4) | | | $ | (8.8) | | | $ | (71.8) | |
| Materials & Construction depreciation and amortization | 2.6 | | | 3.0 | | | 5.4 | | | 5.8 | | | 11.0 | |
| Materials & Construction EBITDA | (5.0) | | | (1.3) | | | (6.0) | | | (3.0) | | | (60.8) | |
| Impairment of assets related to Materials & Construction | 5.6 | | | — | | | 5.6 | | | — | | | 55.3 | |
| Loss (income) attributable to noncontrolling interest | — | | | 0.4 | | | 0.6 | | | 0.7 | | | 1.9 | |
| M&C Adjusted EBITDA | $ | 0.6 | | | $ | (0.9) | | | $ | 0.2 | | | $ | (2.3) | | | $ | (3.6) | |
| | | | | | | | | |
| Other discrete items impacting the respective periods - income/(loss): | | | | | | | | | |
| One-time charges related to the evaluation of strategic options for the Materials & Construction segment | $ | (0.2) | | | $ | (1.0) | | | (0.3) | | | (1.2) | | | $ | (0.9) | |
| | | | | | | | | |
| Aggregate tons delivered (tons in thousands) | 160.8 | | | 209.6 | | | 308.4 | | | 410.6 | | | 684.7 | |
| Asphalt tons delivered (tons in thousands) | 38.6 | | | 92.7 | | | 72.4 | | | 169.7 | | | 196.5 | |
| | | | | | | | | |
| June 30,
2020 | | December 31,
2019 | | June 30,
2019 | | | | |
Backlog at period end (in millions)2 | $ | 112.3 | | | $ | 58.7 | | | $ | 77.6 | | | | | |
1 The Company's GPRM Prestress ("GPRM") operating unit was a 51% owned consolidated subsidiary through its disposal at the end of Q2 2020 and GLP Asphalt is a 70% owned consolidated joint venture.
2 In prior periods, backlog included amounts related to GPRM of $20.8 million and $27.6 million as of December 31, 2019 and June 30, 2019. However, starting in this Supplemental Information document for the three and six months ended June 30, 2020, we have excluded these amounts from the calculation of backlog due to the disposal of GPRM at the end of Q2 2020.
